Stock market: Oil price hike not a big concern, AI is, says Nischal Maheshwari

Market veteran Nischal Maheshwari in an exclusive interview to Business Today said he finds the emergence of generative artificial intelligence (Gen AI) as a bigger risk for the stock market than the recent sharp hike in crude oil prices. 

Maheshwari said he sees no strong reasons to believe Nifty can test 17,000-18,000 level going ahead, even as he felt the recent spike in crude oil prices is painful for the economy and investors at large. 

The market veteran cited past geopolitical tensions such as Gulf war of 1997 to note that crude prices have in the past gone up sharply, most of the time, it reverses and go back below the starting point. 

"Why I am tell you this is because you have to understand that the growth in the boil demand world war is only 2-3 per cent a year and the oil production is going up almost around 4-5 per cent a year and slowly that is getting replaced by the solar energy and all," he told Business Today. 

Maheshwari said there was a huge flood of oil, across the world, ahead of the war and still continues to be there. 

"Once things settle down, oil prices will go back to may be around $70-78 kind of a number," he said.

Maheshwari said the the bigger issue is the AI disruption. "That's a very big thing. This is where the market and, personally, I also have not been able to put my arms around it in terms of how much impact it will happen on the world economy," Maheshwari said.

The market expert said India’s corporate earnings could grow at 10–12 per cent for the coming financial year. For investors deploying fresh capital, he recommended focusing on domestic themes such as banking, automobile and  consumption. Besides,  Maheshwari prefers globally-resilient sectors like pharma, particularly CDMO and hospital businesses. 

Maheshwari sees AI disruption as a larger long-term challenge for global markets and the Indian IT sector in particular.